BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Receive Report of Bids, Ratify Addenda, Approve the Contingency Fund, and Award the Construction Contract to Kiewit Infrastructure West Co., for the Rinconada Water Treatment Plant Reliability Improvement Project Phases 3-6, Project No. 93294057, Contract No. C0688 in the Amount of $303,900,000 (Los Gatos, District 7).
End
RECOMMENDATION:
Recommendation
A. Ratify Addenda Nos. 1 through 18 to the Contract Documents for the Rinconada Water Treatment Plant (RWTP) Reliability Improvement Project (RIP) Phases 3-6;
B. Award the Contract to Kiewit Infrastructure West Co, located in Fairfield, California, in the sum of $303,900,000; and
C. Approve a contingency sum of $30,390,000 and authorize the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
Body
SUMMARY:
The Rinconada Water Treatment Plant Reliability Improvement Project (Reliability Project) was initiated to increase plant reliability to meet peak summer demands, update technology and infrastructure, and implement process improvements. The Board awarded the original construction contract on May 26, 2015, to Balfour Beatty Infrastructure, Inc. (BBII) and they completed two phases of the work. The design of phases 3-6 has been repackaged in order to proceed with constructing the remainder of the Reliability Project.
The successful completion of the Rinconada Water Treatment Plant Reliability Improvement Project Phases 3-6 (Project) will allow staff to efficiently operate the 100 million gallons of water per day (MGD) facility. The Project will construct the ozone generation building, liquid oxygen facility, fluoride facility, new filters, and bioretention basins; modify existing chemical systems; demolish existing clarifiers and filters; upgrade the plant water system; and perform other miscellaneous site improvements.
Project Background
The Rinconada Water Treatment Plant (RWTP) was completed in 1967 and is Santa Clara Valley Water District’s (Valley Water) second largest plant. The RWTP currently has the capacity to deliver up to 80 million gallons of water each day (MGD) to retailers who then supply residential and commercial users. The RWTP draws water from the South Bay Aqueduct, the San Luis Reservoir, as well as the Anderson and Calero Reservoirs.
The Board awarded a $179,850,000 construction contract (Reliability Construction Contract) on May 26, 2015, to BBII (Reliability Contractor) for the Reliability Project. The original Reliability Construction Contract provided for the Reliability Project to be built in six phases within a 5-year period, however, on March 10, 2020, the board approved Amendment One to the Reliability Construction Contract. Amendment One reduced the scope of work, resulting in the Reliability Contractor only completing Phases 1 and 2, and eliminating Phases 3, 4, 5, and 6 from the Reliability Construction Contract.
On January 12, 2021, the board accepted the Phase 1 and 2 work as complete, and directed the Clerk of the Board to sign and submit the Notice of Completion for recording. The Reliability Project design has been repackaged to complete construction of the remaining phases.
Addenda Ratification
Eighteen (18) addenda were issued during the bid period to clarify the Project Contract Documents and answer bidders’ questions. To formally incorporate the Addenda into the Project Contract Documents, staff recommends that the Board ratify the addenda.
RWTP Reliability Improvement Project Phases 3-6 Plans and Specifications were provided by separate communication to the Board for their review prior to taking the recommended action to adopt the Plans and Specifications for bid advertisement. The Addenda were also provided by separate communication to Valley Water’s Board of Directors for their review prior to taking the recommended action to ratify.
To protect sensitive information related to the Project, all parties interested in accessing the Plans and Specifications, and Addenda were registered as a vendor at the Valley Water Vendor Portal and submitted a completed Non-Disclosure Agreement (NDA) to access the Contract Documents.
Contract Award
A report of bids received at the bid opening for the Project on July 12, 2023, is summarized in Table 1.
The bid submitted by Kiewit Infrastructure West Co. is approximately 17% higher than the Engineer’s estimate of $259,675,000. The two bids received were $80,062,000 apart. The low bid price and the low number of bids received reflects the current market conditions for the scope of work such as this Project.
Staff reviewed the bid proposal and recommends the Board award the construction contract to Kiewit Infrastructure West Co. for the following reasons:
1. All bid entries and requirements in the proposal submitted by Kiewit Infrastructure West Co. are in order;
2. Kiewit Infrastructure West Co.’s license is current, active, and in good standing; and
3. Kiewit Infrastructure West Co. is in compliance with the requirements of California Labor Code section 1771.1. because Kiewit Infrastructure West Co. and its subcontractors are registered with the California Department of Industrial Relations and qualified to perform public works pursuant to Section 1725.5 of the Labor Code.
Table 1 - Bid Summary
|
Company, Location |
Bid Price |
Award Amount |
|
Kiewit Infrastructure West Co., Fairfield, CA |
$ 303,900,000.00 |
$ 303,900,000.00 |
|
J.F. Shea Construction, Inc., Walnut, CA |
$ 383,962,000.00 |
|
|
Engineer’s Estimate: $259,675,000 |
Staff recommends the Board award the construction contract to Kiewit Infrastructure West Co. as the responsible bidder submitting the lowest responsive bid.
Contingency Funds
The Contract award sum for the Project is $303,900,000. To allow staff to quickly address unforeseen or changed site conditions and other unanticipated occurrences, without causing unnecessary delays or consequential costs to the Project, staff recommends the Board approve encumbering a contingency amount of $30,390,000, which amounts to 10% of the contract amount.
The above-contingency amount was estimated due to known and unknown risks, such as:
1. Unforeseen conditions and field conditions that may be different from the baseline and as-built information used in the preparation of the Project Contract Documents;
2. Unanticipated variances in quantities and cost of various lump sum items estimated in the Bid Proposal;
3. Differing site conditions;
4. Coordination issues and risks associated with weather conditions; and
5. Impacts associated with plant shutdowns and keeping the plant operational during construction.
Approval of individual change orders for the Project will be subject to approval at the following designated amounts:
Engineering Unit Manager: $250,000
Deputy Operating Officer: $500,000
Assistant Chief Executive Officer: $2,500,000
Chief Executive Officer: Up to $5,000,000
Relevant Prior Board Actions
On January 27, 2015, the Board certified the Final Environmental Impact Report (EIR); adopted the Mitigation, Monitoring, and Reporting Program, Findings of Fact, and Statement of Overriding Considerations; held a Public Hearing on the Engineer’s Report; Adopted a Resolution approving the Engineer’s Report; and approved the Project.
On May 26, 2015, the Board approved the construction contract award to Balfour Beatty Infrastructure, Inc. as the responsible bidder submitting the lowest responsive bid.
On March 10, 2020, the Board approved Amendment One to the Reliability Construction Contract with Balfour Beatty Infrastructure, Inc., reducing their scope of work.
On January 12, 2021, the Board accepted the Phase 1 and 2 work as complete, and directed the Clerk of the Board to sign and submit the Notice of Completion for recording.
On January 18, 2023, the Board approved the Standard Consultant Agreement with Parsons Transportation Group Inc. to perform Construction Management Services during Project construction.
On March 28, 2023, the Board considered the Fourth Addendum to the Environmental Impact Report (Attachment 4), adopted the Project plans and specifications, and authorized advertisement for bids for construction.
Outreach to Bidders
Valley Water staff conducted a pre-advertisement outreach, to approximately two thousand (2,000) contractors/vendors through PlanetBids, which included a brief description of the Project scope, cost, and advertisement dates. This outreach included a brief survey to solicit market interest and inquired if Contractors/Vendors would be interested in bidding and if not, to provide comments and feedback. Valley Water received 50 responses including from six (6) prime contractors indicating their interest in bidding the Project.
The Notice to Bidders was sent to approximately seven hundred and fifty (750) contractors that have the appropriate license. Six (6) Chambers of Commerce, one hundred and twenty-five (125) plan rooms (Builder Exchanges), and Valley Water’s own website were used to solicit interest in the Project from prospective contractors. contractors were contacted using Valley Water’s own Vendor/Contractor Database through PlanetBids Vendor Portal. Valley Water also placed an advertisement in the San Jose Post Record for two weeks.
Rights-of-Way
All right-of-way necessary to construct the Project has been secured.
Permits
All necessary permits for construction of the Project will be obtained by the Contractor. Permits include but are not limited to the following:
1. Hazardous Materials Permit from Santa Clara County Fire Department
2. Fire Alarm and Sprinkler Permit from Santa Clara County Fire Department
3. Ozone Generator Permit from Bay Area Quality Management District (BAAQMD)
4. Town of Los Gatos Encroachment Permit
Public Outreach
Various approaches will be utilized to notify the neighborhood adjacent to the Rinconada Water Treatment Plant about the Project before construction begins. Social Media channels such as Nextdoor and Facebook will update the residents about the work. Mailers will also be developed for distribution before construction starts and ongoing updates will be posted on Valley Water’s RWTP web page. A public meeting in the neighborhood is being planned to take place prior to commencement of construction.
Next Steps
If the Board approves the recommendations, staff will proceed with administering construction of the Project, which is anticipated to begin in September 2023 and be completed by Summer 2029, followed by a three (3) month close-out period.
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item. However, environmental justice impacts will be assessed and reported as part of Project implementation action items brought to the Board.
FINANCIAL IMPACT:
The Rinconada Water Treatment Plant Reliability Improvement Project Phases 3-6, Project No. 93294057, is included in the Capital Improvement Program (CIP) Fiscal Year (FY) 2024-28 Five-Year Plan and in the FY 2023-24 Adopted Budget. The total cost for the recommended construction contract, including the change order contingency sum of $30,390,000 is $334,290,000.
Based upon current estimates, there are adequate funds in the Project’s Board-adopted FY 2024 budget to encumber the planned expenditures for construction to be incurred during this fiscal year. Funds to cover the remaining anticipated construction costs will be included in the biennial budget process and recommended by staff during the annual fiscal year budget process or through budget adjustment(s), if needed.
Award of this construction contract would increase the total Project cost reflected in the CIP’s Adopted FY 2024-28 Five-Year Plan by approximately $66,722,000. The increase in the total Project cost will be incorporated into the CIP’s Draft FY 2025-29 Five-Year Plan. The Project is funded by the Water Utility Enterprise Fund (Fund 61) with 100% of the costs allocated to Zone W-2 (North County).
CEQA:
On January 27, 2015, the Board approved the Rinconada Water Treatment Plant Reliability Improvement Project after making CEQA findings, adopting the Mitigation, Monitoring, and Reporting Program, and Certifying the Final Environmental Impact Report (EIR) for the Project (Attachment 3).
The Fourth Addendum to the Environmental Impact Report (Attachment 4) was approved in conjunction with the Board Agenda Memorandum for Advertisement of the Project on March 28, 2023. The Addendum concludes that the proposed Project modifications would not result in any new significant impacts or substantial increase in severity of a previously identified significant impact. Pursuant to Section 15164 of the CEQA Guidelines, the Board should consider the Addendum with the Final EIR before taking action on the Project.
ATTACHMENTS:
Attachment 1: Project Delivery Process Chart
Attachment 2: Location Map
Attachment 3: Final Environmental Impact Report
Attachment 4: Addendum No. 4
UNCLASSIFIED MANAGER:
Manager
Emmanuel Aryee, 408-630-3074